DXC Technology is the spin-off of Hewlett Packard Enterprise's enterprise services business referred to as Everett SpinCo and the immediate merger between said spin-off and Computer Sciences. The company is a leading provider of technology consulting, outsourcing and support services for infrastructure, applications and business process domains, including strategic enterprise service offerings of cloud, security, analytics, and data management.
DXC Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for DXC Technology Co with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that DXC Technology Co ranked in the 48th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. In terms of the factors that were most noteworthy in this DCF analysis for DXC, they are:
39% of the company's capital comes from equity, which is greater than just 13.09% of stocks in our cash flow based forecasting set.
DXC Technology Co's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -9.18. This coverage rate is greater than that of only 8.62% of stocks we're observing for the purpose of forecasting via discounted cash flows.
The weighted average cost of capital for the company is 15. This value is greater than 98.69% stocks in the Technology sector that generate free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Technology that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as DXC, try COMM, INOD, SOFO, CCIHY, and CLGX.
LONDON/PARIS: France's Atos confirmed on Thursday it has made a bid approach for US rival DXC Technology in what would be the deal-hungry IT consulting group's biggest ever acquisition. Atos issued a statement confirming a Reuters report that is seeking to buy DXC in what it said was a "friendly transaction" to create a digital services powerhouse with a global presence. The French firm, led by chief executive Elie Girard, made a formal approach to DXC this week valuing the New-York listed company at more than US$10 billion (RM40 billion) including debt, two sources told Reuters on condition of anonymity. DXC said in a statement it had received a takeover proposal on Wednesday night and had no prior knowledge of any interest from Atos. It called the offer "unsolicited, preliminary and n...